One of the big questions when selling property is: “What sale method should I choose?”

27 Oct 2016 Glynde 0 Comment

Is my property most likely to find a buyer at a public auction, or should I seek a private sale?

According to property industry experts, not every property is an excellent prospect to sell at auction.

However many are prime candidates for auctions because of their age, location, price and/or scarcity.

6 things to check before you auction your home

We’ve identified the key factors that reveal whether your home is auction material:

1. Location

Is your property in a suburb that strongly favours auctions? If so, beware of selling any other way, says Frank Valentic, Managing Director of Advantage Property Consulting.

Valentic has witnessed thousands of auctions as he lives in the “auction capital of the world” – Melbourne – which hosts hundreds of auctions most weekends.

Melbourne’s biggest weekends can have up to 1400 auctions scheduled.

“Some areas are predominantly sold by way of auction especially in the inner suburbs (so) if they (properties) are put on the market as a private sale often people think there is something wrong with the property or that it has been on the market for a long time,” he says.

2. Price point

If you plan to sell a multi-million-dollar property a public auction is not usually the best way to do it.

Properties at the high end in the $5m-plus price range are normally sold by private sale.

For an auction to work, it must have two or more buyers who bid. And at this price point, you are unlikely to attract enough prospective buyers to achieve a sale under the hammer.

“Properties at the high end in the $5m-plus price range are normally sold by private sale or expressions of interest rather than auction as the buyer pool is smaller and often buyers don’t want to be known,” Valentic says.

3. Presentation

If a property presents poorly it is often best to sell the property by way of private sale rather than auction, Valentic says.

Robert Di Vita, Buyer’s Advocate at National Property Buyers, which has offices in Melbourne, Brisbane and Adelaide, has a different viewpoint.

He thinks properties in a poor state of repair often attract strong bidding from buyers at auction.

“Assuming the location has value, poor condition properties needing a lot of work often produce exceptionally strong auctions because you end up with bidding from handy owner-occupants wanting a foothold in a desirable area and also investors,” Di Vita says.

6. Proving hard to sell

If you are finding it really difficult to sell and cannot wait any longer, you may decide enough is enough.

In such circumstances, an auction may bring the breakthrough you need, Di Vita says.

Perhaps you initially listed your property for private sale but factors including location (it may be a rural property in a remote area), the type of property it is and/or the local economy have deterred buyers.

Now the listing has gone stale, the phone has stopped ringing and you need to set an end date.

“It can work for those properties for which it’s difficult to find buyers as an auction neatly draws the sale process to a head.”